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Preparing a Cash Budget

La Famiglia Pizzeria provided the following information for the month of October:

Sales are budgeted to be $$161,000.$ About $85\%$ of sales is cash; the remainder is on account.

La Famiglia expects that, on average, $70\%$ of credit sales will be paid in the month of sale, and $28\%$ will be paid in the following month.

Food and supplies purchases, all on account, are expected to be $$105,000.$ La Famiglia pays $25\%$ in the month of purchase and $75\%$ in the month following purchase.

Most of the work is done by the owners, who typically withdraw $$6,000$ a month from the business as their salary. $($Note: The $$6,000$ is a payment in total to the two owners, not per person.$)$ Various part$-$time workers cost $$7,300$ per month. They are paid for their work weekly, so on average $90\%$ of their wages are paid in the month incurred and the remaining $10\%$ in the next month.

Utilities average $$5,950$ per month. Rent on the building is $$4,100$ per month.

Insurance is paid quarterly; the next payment of $$1,300$ is due in October.

September sales were $$181,500$ and purchases of food and supplies in September equaled $$130,000.$

The cash balance on October $1$ is $$2,147.$

Required:

Question Content Area

If required, round your answers to the nearest dollar.

$1.$ Calculate the cash receipts expected in October.

$fill in the blank $7$f$469$bff$703$b$058\_1$

$2.$ Calculate the cash needed in October to pay for food purchases.

$fill in the blank $7$f$469$bff$703$b$058\_2$

Question Content Area

$3.$ Prepare a cash budget for the month of October.

La Famiglia Pizzeria

Cash budget

For the month of October

Beginning balance $fill in the blank dd$268103$efeefeb$\_1$

Cash receipts fill in the blank dd$268103$efeefeb$\_2$

Cash available $fill in the blank dd$268103$efeefeb$\_3$

Less:

Payments for food and supplies purchases $fill in the blank dd$268103$efeefeb$\_4$

Owners' draw fill in the blank dd$268103$efeefeb$\_5$

Workers' wages fill in the blank dd$268103$efeefeb$\_6$

Utilities fill in the blank dd$268103$efeefeb$\_7$

Rent fill in the blank dd$268103$efeefeb$\_8$

Insurance fill in the blank dd$268103$efeefeb$\_9$

Total disbursements $fill in the blank dd$268103$efeefeb$\_10$

Ending balance $fill in the blank dd$268103$efeefeb$\_11$

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